System for monitoring increasing income financial products

• US 20030040999A1
• Filed: 06/25/2002
• Published: 02/27/2003
• Est. Priority Date: 06/08/1999
• Status: Abandoned Application

• Current Assignee: Bernard P. Hagan
• Original Assignee: Bernard P. Hagan
• Inventors: Hagan, Bernard P.
• Application Number:
  US10/179,504
• Publication Number:
  US 20030040999A1
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

The increasing income financial product is a financial contractual product or program wherein a subscriber invests and designates primary and secondary beneficiaries. Investment plans include (a) lump sum (b) periodic (c) a pledge of an asset, or (d) combinatory. The primary beneficiary is assigned to a group of similar beneficiaries and to a certain contract group. With pledges, when the primary dies, the pledged assets are gathered by an administrator. Income is paid according to the contract to surviving primaries on an increasing, survivorship basis until (a) all primaries die; or (b) a predetermined percentage die; (c) the contract expires per its parameters; or (d) upon any other contractually defined event. Alternatively, the increasing income may be paid to the surviving members based upon mortality tables. Upon expiration, the surviving primaries or designated secondaries receive pro rata shares of the principal from the contract group. A self-directed financial investment feature enables the subscriber/primary beneficiary to direct investments.

Claims

1. A computerized method for monitoring and maintaining a financial product, purchased by a plurality of subscribers, paying increasing income to a plurality of primary beneficiaries based upon their comparable survival in a predetermined group including the steps of:

providing at least one computer system for processing transactions, including subscriber payments and increasing income payments, and for reporting the status of beneficiary accounts, said subscriber payments including one form of payment from the group of a lump sum, periodic payments, a pledge of a subscriber'"'"'s financial asset, and a pledge of a subscriber'"'"'s financial asset accompanied with periodic payments;

monitoring, via said at least one computer system, the establishment of a plurality of contracts for a corresponding plurality of primary beneficiaries, each primary beneficiary of said plurality of primary beneficiaries designating a corresponding secondary beneficiary;

monitoring, via said at least one computer system, said subscriber payments and obtaining, in the event of a death of a respective beneficiary associated with a corresponding subscriber'"'"'s pledge, said corresponding subscriber'"'"'s financial asset pledged as payment;

segregating said plurality of primary beneficiaries into a plurality of contract groups, each contract group utilizing one contract of said plurality of contracts, wherein each primary beneficiary of a respective contract group has (i) substantially similar demographics as compared with others in the same contract group, and (ii) a substantially similar contract compared with others in the same contract group;

monitoring, via said at least one computer system, compliance with contractual parameters which parameters define unique attributes of a respective contract of said plurality of contracts for said respective contract group, said contractual parameters including;

(i) a beginning of an increasing income payment period,

(ii) an expiration parameter representing an ending of said increasing income payment period,

(iii) the presence or absence of an income target value, and,

(iv) the presence or absence of an invasion of principal parameter;

monitoring, via said at least one computer system, an investment of funds created by said subscriber payments on behalf of said primary beneficiaries in compliance with said contractual parameters for said plurality of contracts;

directing and reporting, via said at least one computer system, the payment of increasing income to primary beneficiaries surviving others in said respective contract group of said plurality of contract groups; and

,

directing and reporting, via said at least one computer system, the payment of principal to said secondary beneficiaries upon the occurrence of said expiration parameter for said respective contract group.

2. A method as claimed in claim 1 wherein the step of monitoring investments is processed substantially independently with respect to the steps of monitoring the establishment of the contracts, processing subscriber payments and directing payment of said increasing income.

3. A method as claimed in claim 1 wherein the beginning and an ending of an increasing income payment period includes at least one inception contractual parameter and a closure contractual parameter.

4. A method as claimed in claim 1 wherein said expiration parameter includes the step of determining at least one from the group of (i) whether all primary beneficiaries have died;

(ii) a predetermined time has past since said beginning of said increasing income payment period;

(iii) the occurrence of a predetermined contractual event.

5. A method as claimed in claim 1 wherein said step of monitoring the presence or absence of said income target value includes monitoring factors relative to at least two from the group of income generation from a predetermined investment, realized capital gain, unrealized capital gain, prospective capital gain, and a time factor associated with said predetermined investment.

6. A method as claimed in claim 2 wherein the beginning and an ending of an increasing income payment period includes at least one inception contractual parameter and a closure contractual parameter.

7. A method as claimed in claim 6 wherein said expiration parameter includes the step of determining at least one from the group of (i) whether all primary beneficiaries have died;

(ii) a predetermined time has past since said beginning of said increasing income payment period;

(iii) the occurrence of a predetermined contractual event.

8. A method as claimed in claim 7 wherein said step of monitoring the presence or absence of said income target value includes monitoring factors relative to at least two from the group of income generation from a predetermined investment, realized capital gain, unrealized capital gain, prospective capital gain, and a time factor associated with said predetermined investment.

9. A method as claimed in claim 1 including the step of providing at least two interconnected computer systems and wherein the steps of processing transactions, subscriber payments, increasing income payments, and reporting the status of beneficiary accounts are executed by one of said two computer systems and wherein the step of monitoring the investment of funds is executed by the other of said two computer systems.

10. A method as claimed in claim 9 including the step of establishing a telecommunications link between said two interconnected computer systems to exchange data relative to said processing transactions and said monitoring the investment of funds.

11. A method as claimed in claim 1 wherein said plurality of contracts is one of an irrevocable trust contract, an annuity contract, a life insurance contract, a contract establishing a closed end mutual fund, a limited partnership contract, and any other type of legal contractual structure, and said monitoring and compliance step maintaining compliance with contractual parameters establishing said one contract.

12. A method as claimed in claim 11 wherein said annuity contract is one of a life annuity, an annuity for a term of years, an annuity for a life plus a survivor'"'"'s life, an annuity for a life plus a survivor'"'"'s life limited by term of years, and said monitoring and compliance step maintaining compliance with contractual parameters establishing said one annuity contract.

13. A method of monitoring and maintaining a financial product, purchased by a plurality of subscribers, paying increasing income to a plurality of primary beneficiaries based upon their comparable survival in a predetermined group including the steps of:

obtaining subscriber payments for funding said increasing income financial product, said subscriber payments including one form of payment from the group of a lump sum, periodic payments, a pledge of a subscriber'"'"'s financial asset, and a pledge of a subscriber'"'"'s financial asset accompanied with periodic payments;

establishing a plurality of contracts for a corresponding plurality of primary beneficiaries, each primary beneficiary of said plurality of primary beneficiaries designating a corresponding secondary beneficiary;

monitoring said subscriber payments and obtaining, in the event of a death of a respective beneficiary associated with a corresponding subscriber'"'"'s pledge, said corresponding subscriber'"'"'s financial asset pledged as payment;

segregating said plurality of primary beneficiaries into a plurality of contract groups, each contract group utilizing one contract of said plurality of contracts, wherein each primary beneficiary of a respective contract group has (i) substantially similar demographics as compared with others in the same contract group, and (ii) a substantially similar contract compared with others in the same contract group;

assuring compliance with contractual parameters which parameters define unique attributes of a respective contract of said plurality of contracts, said contractual parameters including;

(i) a beginning of an increasing income payment period,

(ii) an expiration parameter representing an ending of said increasing income payment period,

(iii) the presence or absence of an income target value, and,

(iv) the presence or absence of an invasion of principal parameter;

directing the investment of funds created by said subscriber payments for said plurality of contracts;

directing and reporting the payment of increasing income to primary beneficiaries surviving others in said respective contract group of said plurality of contract groups; and

,

directing and reporting the payment of principal to said secondary beneficiaries upon the occurrence of said expiration parameter for said respective contract group.

14. A method as claimed in claim 13 wherein the step of assuring compliance with the contractual parameter of said income target valve utilizes factors relative to income generation from a predetermined investment, prospective and realized capital gain, and an investment time factor associated with said predetermined investment.

15. A method as claimed in claim 13 including the step of assuring compliance with a closure contractual parameter, said closure contractual parameter including one from the group of a maximum number of primary beneficiaries in said contract group, a total monetary limit associated with said respective contract for said respective contract group, and a predetermined time period.

16. A method as claimed in claim 13 wherein said contractual parameter relative to said beginning of an increasing income payment period is an inception parameter, said inception parameter is at least one parameter from the group including a minimum number of primary beneficiaries in said contract group, a minimum monetary limit associated with said respective contract for said respective contract group, a predetermined time from acceptance of payment from a subscriber on behalf of a primary beneficiary, and any contractually defined event.

17. A method as claimed in claim 16 wherein, in said step of assuring compliance, said inception parameter correlates to a beginning of an accumulation of income time period which will, at some time in the future, support increasing income payments to surviving primary beneficiaries in a respective contract group.

18. A method as claimed in claim 17 wherein said step of assuring compliance includes assuring compliance with a contractual closure parameter, said closure parameter including one from the group of a maximum number of primary beneficiaries in said contract group, a total monetary limit associated with said respective contract for said respective contract group, and a predetermined time period, said closure parameter relating to a predetermined closure event which, as a result thereof, said administrator is contractually prohibited from placing additional primary beneficiaries into said respective contract group.

19. A method as claimed in claim 18 wherein, in said step of assuring compliance, said expiration parameter relates to said end of said accumulation of income time period and payment of increasing income payments to surviving primary beneficiaries in a respective contract group, and an occurrence of said expiration parameter event triggering said step of directing and reporting the payment of principal.

20. A method as claimed in claim 19 wherein, in said step of assuring compliance, said income target value utilizes factors including income generation from a predetermined investment, prospective and realized capital gain, and an investment time factor associated with said predetermined investment.